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Service Charge Disputes - 'A Bone Of Contention'

Posted on Monday 1st September 2014 by Matthew Lewis

It’s no secret that residential leasehold property law can be extremely complex. Nor that service charge disputes are a major bone of contention.Matthew Lewis - Solicitor, Coles Miller

But what leasehold tenants and landlords might not appreciate is just how fine the margin for error can be.

A recent appeal to the Upper Tribunal is a timely reminder. It centred on a historic determined dispute over an insurance premium (£301.91) as part of a service charge.

I’ll spare you the complexities and cut to the chase:

  • The tenant was successful in her application to what was then the Leasehold Valuation Tribunal (LVT), now the First-tier Tribunal (Property Chamber) or FTT
  • The landlord sought her costs in that application but the tenant appealed to the Upper Tribunal and won
  • The landlord was unsuccessful in her bid recover £6,250 in legal costs. She had tried to use a provision in the lease referring to costs incurred in contemplation of service of a notice under section 146 of the Law of Property Act 1925.

And here comes the interesting bit…

The landlord lost for two reasons – both of which are fine technical points:

  • She was not able to rely on this provision within the lease because she did not bring the proceedings and it could not be said that she contemplated serving a notice under section 146
  • The sum in question – the aforementioned £301.91 – was below the statutory minimum of £350 for cases of this kind.

This is a salutary reminder to landlords of how specialist legal expertise can make a big difference to the outcome.

That said, it is also an important reminder to tenants to assess the likely cost implications in any tribunal procedure involving residential leasehold property.

Are you worried about a service charge dispute? Buying the freehold? Need lease extension advice?

We can help make the process quicker, easier and less stressful for you. For expert legal advice, contact Coles Miller leasehold property solicitor Matthew Lewis, 01202 293226.

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